NOTES ON MORTGAGES

Spring 19995

Interest Rate Trends. What a great time to buy a house -- interest rates are at their lowest level in over a year. Hopefully, Allen Greenspan and the interest rate markets have come to grips with the economy. After a year of inflation fears, those who influence interest rates, seem to have calmed their nerves ... smooth sailing for the immediate future?

The Real Estate Market. Sales of existing homes remain steady, however; the over protective credit practices of the late eighties and early nineties are showing some signs of easing. The best example of this: the changes to the FHA underwriting guidelines (please see below.)

FHA Update. Underwriting guidelines for most HUD insured loans have been substantially eased. Some examples include:
1) Less restrictions on debt -- child care expenses needn't be counted against a borrower. Installment debt with less than ten months remaining, needn't be counted as well.
2) More lenient view of part time income.
3) Less restrictions on cash used to close on the real estate.